Amid the prevailing high level of inflation in the country, the government and the Reserve Bank of India (RBI) have been taking several steps to tame the pace of price rise. As part of this, the Centre has also allowed duty-free import of 20 lakh tonnes of crude soyabean and sunflower oil to cool edible oil prices. Here’s what the measure means and its impact on consumers:
Duty-Free Imports of Edible Oils
According to an official notification, the central government has allowed duty-free import of 20 lakh tonnes each of crude soyabean oil and crude sunflower oil for this year and 2023-24. It has come into effect from Wednesday. It means that till March 31, 2024, a total of 80 lakh tonnes of crude soyabean oil and crude sunflower oil could be imported duty-free.
By doing so, India has exempted customs duty and agriculture infrastructure development cess on the import of these two edible oils. The government issued a notification regarding a tariff-rate quota of 20 lakh tonnes each for crude soyabean and sunflower oils. Under the TRQ, a customs duty and agri infra development cess of 5.5 per cent would be removed.
Impact on Consumers
Solvent Extractors’ Association of India (SEA) President Atul Chaturvedi said, “The central government has allowed the import of a quantity of 20 lakh tonnes each of crude soyabean oil and crude sunflower oil per year for two years at nil rate of customs duty and AIDC. It seems the government has taken this decision to provide some relief to consumers in this volatile market and to check the inflation.”
India imports over 13.5 million tonnes of edible oil every year. SEA Executive Director B V Mehta said the prices of soyabean oil are expected to come down by Rs 3 per litre, according to a PTI report.
“This will provide significant relief to consumers,” the Central Board of Indirect Taxes and Customs has said in a tweet.
The edible oil prices in India are also expected to be cooler on Indonesia’s lifting of the export ban on palm oil. The availability of edible oil in India will increase as new imports will start coming in following the lifting of the export ban by the Indonesian government.
The retail inflation in India, based on the Consumer Price Index (CPI), soared to an eight-year high of 7.79 per cent in April 2022, compared with 4.23 per cent in April 2021 and 6.97 per cent in March 2022. Inflation in the food basket rose to 8.38 per cent in April, from 7.68 per cent in the preceding month and 1.96 per cent in the year-ago month.
Inflation in cereals and products in April jumped to a 21-month-high level; vegetables at a 17-month high; and spices at a 17-month high. Consumer food price inflation rose to 8.38 per cent, which is a 17-month high.